The black and white segment is in the past.And Teddy(Joe Pantoliano) tricks Leonard(Guy Pearce)into thinking that Natalie(Carrie Ann-Moss)'s boyfriend Jimmy Grant(Larry Holden)is Leonard'Wife's killer.Teddy leads Lenny to the abandoned place at the start of the film.Jimmy comes to the place and Lenny tells him to remove his shirt and jeans.And Lenny tries to kill Jimmy,but he tells Lenny that he can have the drug money in his car's trunk.Though,he kills Jimmy by strangling him.He takes his clothes and his picture and drags Jimmy's body down stairs,but Jimmy says a dying word "Sammy".Then, he sees Teddy outside and pretends he lost his memories and brings Teddy inside hits him on the head with an object.He tells Teddy why Jimmy knows Sammy and Teddy tells him that he always says about Sammy.And he tells Lenny that his wife actually survived the rape and died the same way that Sammy's wife died,the insulin overdose by Lenny accidentally killing her.And Teddy was hired to get the real killer.Teddy claims that the real killer is just a local with no connections and they had killed him years ago.And Teddy says that he's John G,but not the killer.But Lenny forgot about the entire thing and started making puzzles that are impossible to solve and Teddy took the picture of him getting the John G killed his wife tattoo.Then Lenny claims that Sammy Jankis is a fraud and says that the way of the death is Sammy's wife.Teddy claims that Sammy is a baker and never had a wife.Then, Lenny takes Teddy's gun and drops the ammunitions on his jeep's seat.And takes a picture of Jimmy's car so that he can think that it's his car then takes teddy's car key and throws it in a grass.And writes "Don't believe his lies" on Teddy's picture.Then he goes to a tattoo shop to have Teddy's license plate written on his body.Thus, explaining the theory throughout the movie.
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